Common use of Separation Taxes Clause in Contracts

Separation Taxes. Notwithstanding anything in this Section 2.1 to the contrary, and except as provided in Article IV, Exelis shall be liable for, and shall be entitled to any refunds of, any Taxes for a taxable period that begins before the Distribution Date that are (i) imposed or incurred as a result of any Distribution failing to qualify as a reorganization within the meaning of Section 368(a)(1)(D) and Section 355 of the Code (or any similar provision of state, local or foreign Tax law), (ii) imposed or incurred as a result of the stock of Vectrus distributed in the External Distribution or the stock of Exelis Holdings distributed in the Internal Distribution failing to be treated as qualified property pursuant to Section 355(d) or Section 355(e) of the Code (or any similar provision of state, local or foreign Tax law) and (iii) imposed or incurred as a result of Exelis or Systems otherwise recognizing any gain for Income Tax purposes in connection with any Distribution (other than as a result of any deferred intercompany item (or any similar item under state, local or foreign Tax law) generated by transactions other than any Distribution or the Plan of Separation being taken into account in connection with the Distributions pursuant to Section 1502 of the Code and the regulations promulgated thereunder (or any similar provision of state, local or foreign Tax law)) (collectively, “Separation Taxes”).